Bitcoin (BTC) market bulls and bears are entering a major battle today ahead of the important FOMC meeting scheduled for Wednesday, May 4th. Amid rising inflation, the US Federal Reserve (FED) is expected to raise interest rates by 50 basis points.
Bitcoin continues to trade at $38,000: What does network activity show?
In anticipation of the FED, the US stock market was tense. This has also affected Bitcoin and altcoins. In the last 24 hours, Bitcoin has been fluctuating around $38,000. Over the past week, Bitcoin has struggled to find momentum in either direction. On-chain data provider Glassnode reports that the ownership structure and foundations of Bitcoins are changing at the same time.
Also, some big differences are at play. According to Glassnode, the gap between the purchase price and sale price of Bitcoin’s long-term holders continues to grow. Meanwhile, “daily active addresses” are bullish as the BTC price remains under pressure. In the Santiment chart below, we can see how the “fundamental” network activity for Bitcoin continues to grow.
What could happen after the FOMC meeting?
On the other hand, Ethereum (ETH) is following a similar path. As Cryptokoin.com also reported, ETH has been following the Bitcoin price correction since the beginning of the year. ETH price has been hovering around $2,800 since last week. Looking at the ETH/USD price chart, it is stated that there is a falling wedge that indicates an uptrend. Therefore, it is possible for us to see an upside breakout in the coming days, as stated by some analysts.
The current price action shows a major “stress test” for both Bitcoin and Ethereum ahead of the FOMC Meeting. Abraham Chaibi, co-founder of quantitative crypto trading firm Dexterity Capital, thinks Wednesday’s FOMC meeting will not result in a clear trigger action. The expert points out that everyone is already waiting for this. “Instead, Powell’s long-term forecasts, anything that shows inflation has already pulled back and the Fed can take a more comfortable stance on future hikes, could have a more significant impact,” he says.
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